How To Create A SKU For Your Products

Knowing exactly what products you stock sounds simple, but essential information is often overlooked. Keep an up to date and detailed Product List to be used as a master for all other management documents and spreadsheets.

A key factor in any product list is having relevant Stock Keeping Units (SKU’s) to identify your products.

Whether you have a huge product list, are an online or brick and mortar business, specialise in one product or have a large product list, a SKU system will work for you.

So, what are they? And how can you create your own? Find out below.

What is a SKU (Stock Keeping Unit) Code

An SKU is a unique code given to each product in your inventory. These are essential and will prevent any confusion or mistakes from happening at the order fulfilment and re-ordering stage.

Retailers use SKUs to track both inventory and sales. This information can provide data and analytics that are beneficial to a business and aid in developing relationships with your vendors and customers.

If you are importing from a supplier there may be codes you can already use. However, creating your own codes will make it easy to understand and simple to decode.

How to create your own SKU code

SKUs should provide information on the most important characteristics of a product. Your SKU code can have as many numbers or letters as you need and can describe as many variables as you require.

The information in the SKUs should also be placed in order from important to least important, relevant to you and your business. Here is an example using our hypothetical company Shirts & Co.

This makes it easy if your store stocks variations of the same product.

It is best to keep the same amount of characters in
the abbreviations, so the codes are easy to read. If your item is too hard
to abbreviate then assign a number to each value on the list.

The table below shows an example of different variations that can be coded into an SKU code. It is best to keep the same amount of characters in the abbreviations, so the codes are easy to read. If your item is too hard to abbreviate then assign a number to each value on the list.

So there you have it! SKUs aren’t a one size fits all so the more you tailor it to your specific needs, the more you’ll set your business up for success. If you get stuck just remember to consider what’s most important for you, your customers or your vendors to know about the product.

If you’re an eCommerce business that would like more information on how to manage your stock, download our essential planning and management guide for growing your online store here.